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PhotobucketThere seems to be a lack of understanding of the fundamental foundation of Social Security. It is wage insurance. Each participant insures a portion of their wages or salary depending on their income level and the payments made by each individual and their employers. Those insurance benefits are paid based on a formula depending on the payments made during their working life and age of the person at the time of retirement. What Social Security is not is an income redistribution program to transfer income from high earners to the less fortunate. FDR was very clear on this point and that is why Social Security has its own funding mechanism, separate from the income tax, and its own Trust Fund, separate from the general fund. It was FDR’s view, which I share, that Social Security should be an earned benefit and should never be allowed to be characterized as welfare. As FDR noted. “not the dole, never the dole”. The concept of wage insurance is a primary reason there is a cap on earnings subject to Social Security payroll taxes. The theory is that at higher incomes those individuals likely have other retirement income, pensions and investments, in addition to Social Security so there is an income amount above which “insurance” isn’t needed, and that’s why their is a cap. It’s also the reason that investment income isn’t subject to Social Security taxes. Investment income doesn’t stop when our wages or salary stop so it does not need to be “insured”. As FDR said “from capital nothing is asked and to capital nothing is given”.

There is significant sentiment here at DKOS for removing the cap and a characterization that the cap is unfair to lower income workers and ultimately retirees. There are two primary issues with raising the cap; the first is that higher income earners may not need the additional “insurance”. Second, we would have some Social Security recipients with six figure (or more) benefit payments. Others have argued that we should eliminate the cap, but cap the benefits. This is often referred to as “one small change” that would significantly benefit the Social Security Trust Fund. Such a change would end Social Security as we know it, and violate several of FDR’s founding principles. I certainly understand in this era of declining middle class incomes, and significant income inequality, why people would propose a fundamental change in Social Security. However, I would ask people to be honest about the fact that this would be a fundamental change in Social Security shifting it to an income redistribution program, and in no way should be characterized by the term “one small change”. The reality is that removing the cap, without a corresponding increase in benefits, would be a substantial second, “back door” income tax on high income earners, particularly the self employed who pay both the employer and employee portions of the Social Security payroll taxes. While many here at DKOS would favor any additional income tax on high income earners, let’s at least be honest about what it would be.

There has also been much discussion about the cap and “fairness”. Social Security has several fairness qualities. First, everyone who pays in the same amount receives the same benefit. So if we have one person who earns at the cap amount and one who earns twice the cap amount their benefits will be the same because they paid in the same amount into the system. The fact that the person who earned twice the cap amount paid a much reduced percentage of their income is an interesting fact, but the reality is that they both paid in the same and both earn the same benefit. Surly people should not have to pay more for the same benefit. There is also fairness in how payments are determined. The benefit algorithm is highly weighted in favor of low income earners. The “return” on the first dollar contributed by a low income worker is six time higher than the “return” earned by those contributions at the top of the cap amount.  In addition, the benefits are not subject to income tax for lower income beneficiaries, while taxed for high income beneficiaries. I favor raising the cap, and substantially, with a corresponding increase in maximum benefit payments. To capture 90%, of salaries and wages, the recent stated goal for a sound Social Security system, it is estimated that the cap amount should be approximately $200,000. I think higher income workers would embrace the higher Social Security amounts and benefits. With traditional pensions evaporating, and 401Ks a less reliable retirement vehicle, a new top benefit of approximately $60,000 for people at the new cap amount would be significant.

The political optics of Social Security are very important. The system was specifically designed so that it would be perceived by the public as a "you get what you pay for" system, and specifically so that it could not be painted as "welfare for the elderly," where the rich subsidize everyone else. FDR correctly recognized that a welfare system is much easier for the opponents to kill than a system where the middle class perceived it as "you get what you pay for" system that would be much more difficult to kill.  How many times have you heard seniors say, "I earned my Social Security benefits" or "I only want what I paid for" when talking about Social Security? It was this genius of FDR that allows them to say that. We should not allow wage insurance to become a dole through the mingling of insurance and relief. It must be financed by contributions to the Trust Fund, not general revenue taxes, or a back door tax on high incomes raising the cap without a corresponding increase in benefits, breaking that tie between contributions and benefits.You would be "ending Social Security as we know it." Democrats would be attacked for violating fundamental principles of Social Security, and substituting a welfare system.  And to support that argument, the opposition would cite FDR. It is the nature of the Social Security system that has resulted in the broad support, just as FDR intended.    

If you want progressivity, the income tax system is the place for that.  Do not threaten the existence of Social Security by ending the program as it has existed for decades and substituting a welfare program ("the dole").  That is the quickest way to put the program in jeopardy.  

Unfortunately I will be on an airplane when this diary is published and not able to respond to questions and comments until Friday evening, on the West coast.
My thanks to coffeetalk, who contributed to this diary, however all the errors are mine.  

 photo DKSSDlogo-1.png



"HandsOffMySS" Blogathon: March 25th thru March 29th, 2013
Diary Schedule - All Times Eastern Standard



IT IS TIME TO TAKE A STAND

Social security is a concept enshrined in Article 22 of the Universal Declaration of Human Rights which states that Everyone, as a member of society, has the right to social security.

A limited form of the Social Security program began, during President Franklin D. Roosevelt's first term, as a measure to implement "social insurance" during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50 percent.

Let your voice be heard.

Members of the Daily Kos group Social Security Defenders have organized this bogathon to promote the truth about the financial condition of the Social Security trust fund, and the impacts of various so called reforms and fixes.

Understanding how benefits are calculated, the History of Social Security, where the Wisconsin Idea came from, and how over the years changes have been made to Social Security, all increase awareness and hopefully improve the discussion.





  • Monday, March 25th

11:00am:Roger Fox
1:00 pm: Joan McCarter
3:00 pm: Roger Fox
5:00 pm: KitsapRiver

  • Tuesday, March 26th

11:00am: joanneleon
1:00 pm: joe shikspack
3:00 pm: Arshad Hasan DFA
5:00 pm: Roger Fox

  • Wednesday, March 27th

1:00 pm: teacherken
3:00 pm: Jamess
5:00 pm: Bruce Webb

  • Thursday, March 28th

1:00 pm:
3:00 pm: One Pissed Off Liberal
5:00 pm: floridagal

  • Friday, March 29th

10:00am:Roger Fox
11:00 am: Economist Dean Baker
1:00 pm: VCLib
3:00 pm: Armando
5:00 pm: Liberal Thinking


Please remember to republish these diaries to your Daily Kos Groups.  You can also follow all postings by clicking this link for the Social Security Defenders Blogathon Group. Then, click 'Follow' and that will make all postings show up in 'My Stream' of your Daily Kos page.

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Comment Preferences

  •  All True In Its Time But There's No Longer Value (2+ / 0-)
    Recommended by:
    Words In Action, musiccitymollie

    in it not being a "welfare" program.

    The conservatives and financial world are determined to terminate it no matter what. The student loan program isn't welfare either, the clients pay for it, but similarly the financial world wants that service purely in private hands.

    Purely welfare, purely paid by participants, there would be no change in the pressure to privatize the service.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Fri Mar 29, 2013 at 10:11:54 AM PDT

    •  Of course there's value in not being (6+ / 0-)

      welfare.  Have you forgotten what "welfare queens" did for President Reagan?  Have you forgotten Clinton's "welfare reform"?  

      Even recently, stories of people expecting someone else to support them outrage a large group of people in this country. People here in New Orleans still talk about Sharon Jasper.

      The bottom line is that the middle class in this country does not like the idea of people getting something for nothing.  The middle class is fine with helping people who are seriously disabled, but the middle class does not like what they view as "able-bodied adults" getting something that they did not work to earn.  The middle class DOES support "getting what you pay for" or "getting what you earned."  That's the reasons that SS has such broad support.  FDR understood that, and the work ethic of this country -- that you should, if you are able, have to work for what you get -- is still extremely strong among the middle class.  

      It is extremely important -- even today -- to keep that link between what you "insure" and the level of your benefits.  Means-testing is the quickest way to kill Social Security, because then it's just "welfare for the elderly."  

      •  You're making some pretty big assumptions (3+ / 0-)
        Recommended by:
        lunachickie, andalusi, aliasalias

        about "the middle class in this country."

        "the idea of people getting something for nothing"

        Who says removing the cap is someone getting something for nothing?

        Who says capping the benefit is someone getting something for nothing

        You've made my point: this isn't about fixing social security or FDS or means tests or anything, it's about the corporate Dems who side with Republicans and supply-side economics when it comes to defining what is "fair" economically.

        You assume that those who have the means must have done more to have earned them. This ain't a meritocracy.

        And this is why we still have supply-side economics. The corporate Democrats believe in it.

        Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

        by Words In Action on Fri Mar 29, 2013 at 11:09:13 AM PDT

        [ Parent ]

        •  I'm going on recent history. (3+ / 0-)
          Recommended by:
          erush1345, VClib, notrouble

          I remember how the Republicans used "welfare queens" to lure the so-called "Reagan Democrats" to give Reagan one of the biggest landslide victories in U.S. history.  

          I remember how Clinton was forced to sign welfare reform because of overwhelming popular sentiment.

          Look at this poll, which is typical.  Even assuming Rassmusen over-polls conservatives, that's still an overwhelming majority any way you look at it.  And, Rassmussen repeatedly polls this issue because it works well for conservatives.  Also, look at this NPR poll, where half of Americans -- including half of the poor -- think the poor aren't doing enough to help themselves.  

          The middle class in this country is happy to cut back on welfare.  They are NOT happy with cuts to SS because they believe that it is NOT welfare, that seniors "earned" their benefits.  That is the genius of FDR.  

          Sure, people on Dailykos see nothing wrong with welfare.  I'm telling you that the views of many on Dailykos are far, far to the left of the rest of the country.  All the polls that I've seen show an overwhelming distrust of welfare, and overwhelming belief that it's being "abused."  How many times do conservative websites, even today, talk about the growing number of people on food stamps? Why do conservatives push "drug tests for people on welfare" (supported by 88% in this poll)? Because that works in this country.  The vast majority of people in this country think "able-bodied adults" should have to work for what they get.  No, they do not believe that everyone is going to become Bill Gates.  But they believe that a lot of people on "welfare" could work for a living but find reasons not to.

          Whether you personally think that is true or not, you have to deal with the fact that this is a country with a very strong work ethic.  This country thinks that if you are able to work, you ought to work for what you get.  If the public perceives you earned something, they vehemently support your right to have it.  If the public perceives you are getting something for nothing - -because somebody else paid for it -- they are generally not happy with that.  

          •  The problem there is that nobody (2+ / 0-)
            Recommended by:
            aliasalias, ItsSimpleSimon

            really thinks that Social Security is a welfare program except those corporatists who are bound and determined to reframe it as one. Everyone knows wage earners have their wages taxed for this specific purpose.

            It's tax money that we pay in. Involuntarily.

            And not for nothing, but I fail to see how any of this is a 'Defense of Social Security".

            It is time to #Occupy Media.

            by lunachickie on Fri Mar 29, 2013 at 12:26:04 PM PDT

            [ Parent ]

      •  Higher wage earners live longer (4+ / 0-)

        thus collect for more years.

        I guess they must be getting something for nothing.

        Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

        by Words In Action on Fri Mar 29, 2013 at 11:31:23 AM PDT

        [ Parent ]

      •  coffeetalk - thanks for your help (1+ / 0-)
        Recommended by:
        coffeetalk

        and I was pleased that you had some time to answer questions.

        "let's talk about that"

        by VClib on Fri Mar 29, 2013 at 08:02:35 PM PDT

        [ Parent ]

      •  People don't get "something for nothing" within (0+ / 0-)

        the SS program, as they've had money taken from their paychecks every week or month through FICA earnings for decades.  They've paid money into the system-- therefore, the benefits they accrue do not come back to them in exchange for "nothing."

        That's one more thing to add to my long list of small problems. --my son, age 10

        by concernedamerican on Sat Mar 30, 2013 at 08:35:25 AM PDT

        [ Parent ]

    •  No. There is Still Juice in the Third Rail. (12+ / 0-)

      Yes Conservatives and the Financial World are determined to terminate Social Security no matter what. But then that has been true every decade for the now nearly 8 such since the 1935 Act. Serious runs were made at Social Security in the 70s, in 1981, in 1994, in a 2001/2005 split effort, and again during B-S. And we're beaten back soundly every time. To argue that the very fact that the Barbarian are still around the walls probing for weakness in Fortress SS Insurancen after 78 years of failure is reason to open the Gate to give access to Welfare Lane is from my perspective a little perverse.

      Gooserock's implicit argument is that there is no more danger to having the Barbarians freely roaming Welfare Lane than there was having them locked outside Fortress Insurance seems under supported and motivated only by some vague appeals to "progressivism". As if progressive taxation was an end in itself rather than a pragmatic method to achieve "greatest good for greatest number" outcomes in the face of a system rigged against fair distribution of gains from productivity.

      Me I am all for Social Democratic solutions financed by a combination of progressive taxation, or better by redressing the current power imbalance in distributing productivity gains. But Social Security is absolutely the wrong place to start. It may not be ideologically pure but it mostly works and is broadly popular. Moreover it has proved to be very resilient to assault from the Right. If you want Progressive Solutions funded by Progressive Taxation maybe you could start by feeding and educating children and maybe making sure they actually have a planet to inherit.

      Just leave Social Security alone. It doesn't need this kind of 'help' from its 'friends'.

      socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

      by Bruce Webb on Fri Mar 29, 2013 at 10:42:54 AM PDT

      [ Parent ]

      •  Whose friends are we talking about, again? (2+ / 0-)
        Recommended by:
        aliasalias, Words In Action

        If you want Progressive Solutions funded by Progressive Taxation
         
        as opposed to Corporate Solutions funded by Corporate Taxation? I'm not sure I understand your bigger point, though I do agree with your next-to-last sentence :)
         

        It is time to #Occupy Media.

        by lunachickie on Fri Mar 29, 2013 at 12:33:02 PM PDT

        [ Parent ]

        •  Social Security doesn't need Progressive Solutions (2+ / 0-)
          Recommended by:
          aliasalias, VClib

          Certain progressives have just convinced themselves that it is in fact in some sort of existential crisis (and so adopting Right framing) and that the solution is to tear down its 'regressive' structure and rebuild it 'progressively'. Because FDR sold out blacks to Southern Dixiecrats in designing the program or something.

          I am old enough to remember when the New Left turned on the New Deal coalition and then were joined from the Right by the 'New Democrats'. As if John Dingell was somehow the problem because he privileged the needs of the working class to their cause du jour.

          Social Security and Medicare were not designed on straight Social Democratic lines. And there were reasons for that, maybe reasons that are no longer fully operative. But too many 'progressives' just jump to 'obvious' solutions that ignore the fact that politics is often the art of the possible.

          Social Security isn't perfect. But on balance it should be around item no 50 on the Social Democratic/Leftist/Progressive agenda. Which is what I was getting to in those last few lines. I would rather see people chanting "Save the Planet" "World Peace" and "Feed the Children" than wasting a lot of time on "Just Scrap the Cap".

          socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

          by Bruce Webb on Fri Mar 29, 2013 at 01:08:17 PM PDT

          [ Parent ]

          •  I'd agree with you (3+ / 0-)
            Recommended by:
            tardis10, aliasalias, Words In Action
            But on balance it should be around item no 50 on the Social Democratic/Leftist/Progressive agenda

            except the President offered the program up for grabs--to the GOP--when he didn't need to do so.
             

            That moved it waaay up the list from #50. For millions of us today, it's in the top three, if not the top slot, for a damned good reason: it's all we have left, now that we've been chronically underemployed, unemployed or outsourced to the point where our pensions, 401-ks and savings have all but evaporated.
             

            It is time to #Occupy Media.

            by lunachickie on Fri Mar 29, 2013 at 01:16:08 PM PDT

            [ Parent ]

            •  I didn't say DEFENDING Social Security (3+ / 0-)
              Recommended by:
              lunachickie, aliasalias, VClib

              is item no 50. I mean I FOUNDED the SSD Group.

              It is the buying into 'Crisis' and proposing progressive 'Solutions' that should be no 50 at best.

              socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

              by Bruce Webb on Fri Mar 29, 2013 at 01:29:58 PM PDT

              [ Parent ]

              •  Progressives aren't buying into the "crisis" (1+ / 0-)
                Recommended by:
                Words In Action

                They're proposing a simplistic alternative to a lack of "revenue" to counter the "crisis meme".

                It is time to #Occupy Media.

                by lunachickie on Fri Mar 29, 2013 at 02:20:34 PM PDT

                [ Parent ]

                •  Of course they are buying in (2+ / 0-)
                  Recommended by:
                  Roger Fox, VClib

                  The amount of money that would pour into (and through) the Trust Fund as a result of an immediate, non phased cap increase is grossly disproportionate to actual revenue needs over the next 10-20 years. And arithmetically would create enormous distortion effects by increasing the amount of accrued interest that legally would serve to pump up Trust Fund balances by compounding and yet is not financed in any way.

                  It goes way beyond simplistic to simple-minded by way of no one apparently doing the math on a year by year basis and distinguishing between real revenues generated via new taxation and perfectly legal but in real terms fictitious revenues gained by interest earnings on new unneeded for now revenues.

                  It isn't enough to just point to 75 year scores of the nominal Trust Fund balances, proponents need to show how it works out via operations tables for the next 10, 20 and 30 years.

                  There might well be a case for a phased in cap increase that raises just enough new revenue each year to put Social Security on a glide path to what the Office of the Actuary calls 'sustainable solvency', but you don't get there by a front loaded "Just Scrap the Cap" move that actually serves to crowd out the possibility for stimulus/infrastructure/job creation/clean energy funding in the near to medium term.

                  And if proponents don't understand WHY Scrap the Cap would have this crowding out effect I suggest they commission one of their own to start cranking out detailed spreadsheets showing how this would actual work year over year.

                  Because if such spreadsheets exist today I haven't seen them. All I see is a two step argument: 1) Social Security has some sort of shortage (whose detailed nature I could not identify on a bet) 2) tax the rich. Done. That is not a plan, that is a bumper sticker.

                  socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

                  by Bruce Webb on Fri Mar 29, 2013 at 04:21:06 PM PDT

                  [ Parent ]

                  •  No kidding! (2+ / 0-)
                    Recommended by:
                    Bruce Webb, Words In Action
                    That is not a plan, that is a bumper sticker.
                    So is the notion that there is a "crisis" at all.

                    So is the notion that progressives are "buying into the crisis meme". We'll have to agree to disagree on this.

                    It is time to #Occupy Media.

                    by lunachickie on Fri Mar 29, 2013 at 04:27:20 PM PDT

                    [ Parent ]

                  •  One "progressive" here who does NOT argue (0+ / 0-)

                    for "scrapping the cap".....

                    I've made my opinions clear to all and sundry.

                    My God, I even agree with coffeetalk on this one!

                    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

                    by ozsea1 on Tue Apr 02, 2013 at 09:58:59 PM PDT

                    [ Parent ]

                •  And not proposing creating 20 million jobs? (1+ / 0-)
                  Recommended by:
                  lunachickie

                  That makes no sense to me.

                  There simply isnt anything wrong with SS that a good economy wont fix.

                  Boos, the math, the math.

                  ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                  by Roger Fox on Fri Mar 29, 2013 at 06:34:28 PM PDT

                  [ Parent ]

                •  Removing the cap is 150% of the alleged shortfall (0+ / 0-)

                  That using a jack hammer when a good screw driver will do.SSTF will be depleted in 2033.

                  ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                  by Roger Fox on Fri Mar 29, 2013 at 06:37:23 PM PDT

                  [ Parent ]

      •  maybe you can answer my question about (1+ / 0-)
        Recommended by:
        Words In Action

        all "the Serious runs were made at Social Security in the 70s, in 1981, in 1994, in a 2001/2005 split effort, and again during B-S".

        My question is has any politician elected to the highest office, or as Dem leader in either House of Congress ever put more effort in changing (aka cuts) SS than Obama ?
         Certainly no Dem Party President has tried so hard (to my knowledge), even Clinton's back door attempts with Erskine Bowles and Newt Gingrich were dropped when the Lewinsky scandal erupted and I don't remember him trying again with adding cuts to something like raising the debt limit, or creating anything the equivalent of Obama's several cat food commissions (which Obama personally staffed with rabid opponents of SS).
         As far as Repub Presidents go GW Bush after his second term election gave up after app. a 6 month effort, and Reagan got his licks in but nothing that I know of compares to Obama's efforts which have spanned his entire Presidency, (not including his remarks as Pres.-elect in an interview).

        My guess is that Obama has the number one spot secured, with second place probably not even close, and I agree with Digby's characterization that it's like an obsession, with Obama being Capt. Ahab and SS the great whale.

        without the ants the rainforest dies

        by aliasalias on Fri Mar 29, 2013 at 02:46:39 PM PDT

        [ Parent ]

        •  All Presidents Dem and Republican (3+ / 0-)
          Recommended by:
          Roger Fox, VClib, notrouble

          Roosevelt oversaw the Social Security Amendment of 1939 which expanded coverage to Survivors
          Truman oversaw the Amendments of 1950 which added regular changes to benefits to reflect inflation in replacement of flat benefit checks and for the first time saw benefits under Title 2 (insurance) exceed those paid out under Title 1 (State based welfare)
          Eisenhouer oversaw the Amendments of 1955 that establishe the Disability Insurance Program starting 1956
          Johnson introduced Medicare which officially came as Amendments to the 1935 Act
          Carter introduced automatic COLA
          Reagan made a run in 1981 which failed and then commissioned the Greenspan Commission
          Clinton not only mulled a Soc Sec Plan but also appointed the Kerrey-Danforth Commission at the suggestion and with the membership of Peter G Petersom
          Bush commissioned CSSS in 2001 with instructions to report plans by winter. Which they did, but had those plans overshadowed and then delayed by 9/11 but never abandoned. Bush did not come out of the blue and claim a mandate to reform Social Security in Nov 2004, the Social Security Tour of 2005 was just the last six months of a process that started in his Administrations first days.

          As compared to Obama whose first actual move was the floating of Chained-CPI aLthough some would add the March 2009 Fiscal Responsibility Summit and Bowles-Simpson, neither of which was exclusively about Social Security.

          I am afraid your premise is fatally flawed. Even if you restrict 'change' to 'cuts'.

          socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

          by Bruce Webb on Fri Mar 29, 2013 at 04:37:59 PM PDT

          [ Parent ]

        •  Hey, aliasalias, you might want to watch the (3+ / 0-)

          recent AARP Forum about the Chained CPI.

          According to the SS Chief Actuary, we did have a cut to Social Security implemented during the Clinton Presidency.  

          The first speaker after introductions are made by the Moderator, is Mr. Stephen Goss.  He is the Chief Actuary for the Social Security Administration.

          He gives an excellent [and easy to understand] explanation of the way that Social Security benefits have been inflation-adjusted since they began applying inflationary formulas to the SS benefit.

          Under Clinton, we took a cut when they moved from what was called a Pure Price Index (as I recall) to what we have now.  Seems like it may be called a "Modified" Price Index, but don't quote me on that.

          Below is a link to the C-Span video.  Obviously, a much better source of information than moi, LOL!

          I hope that folks will watch it.  It really is rather interesting.  

          The speakers are very good.  And Dean Baker is one of them. ;-)

          Cost-of-Living Adjustments and Federal Benefits, March 11, 2013, AARP.

          Mollie

          "Only he who can see the invisible, can do the impossible."-- Frank L. Gaines


          hiddennplainsight

          by musiccitymollie on Fri Mar 29, 2013 at 07:51:55 PM PDT

          [ Parent ]

    •  Thank you, Gooserock, LOL! In one sentence, you (5+ / 0-)

      said what I was trying to say in many rambling paragraphs.

      I'm referring to your observation that:

      The conservatives and financial world are determined to terminate it no matter what.
      I would probably substitute the word 'neoliberals,' for conservatives.

      But you've nailed it!

      Mollie

      "Only he who can see the invisible, can do the impossible."-- Frank L. Gaines


      hiddennplainsight

      by musiccitymollie on Fri Mar 29, 2013 at 11:27:16 AM PDT

      [ Parent ]

      •  I for one, will not open the door to "Welfare Ave" (1+ / 0-)
        Recommended by:
        VClib

        for the GOP.

        ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Fri Mar 29, 2013 at 06:42:05 PM PDT

        [ Parent ]

  •  From a practical perspective, the FICA (5+ / 0-)

    taxes are effective in keeping dollars circulating through the economy and recycling through the Treasury. What is irksome to the private sector financial engineers is that these dollars are not available for them to play with (hoard) AND by being recycled through the Treasury lessen the necessity to issue more to compensate for what the MMT people call "leakage." I don't care for that term because what is happening when dollars are syphoned out of the economy for speculation and in-house trade is not a leakage; it's more like a theft for the simple reason that it does nothing to mediate or facilitate the exchange of real goods and services.
    Gambling Casinos, where there is no pretense about money being played with, do a better job keeping the dollars moving, except when the underground seeks to stash them off-shore to avoid the tax man.

    Considering that the Treasury can issue as many dollars (paper or as electronic blips) as it wants/needs, the practical reason for taxes is recycling and to track what the economy is actually doing. Data collection is important and the data collected is bound to be more accurate, if the quantity is relatively constant.

    We organize governments to deliver services and prevent abuse.

    by hannah on Fri Mar 29, 2013 at 10:17:49 AM PDT

  •  VClib right on cap. Obama wrong. (10+ / 0-)

    Leaving aside the abomination that is Chained-CPI and restricting ourselves just to cap increase proposals the correctness of my comment title should be obvious.

    At least after reading this really excellent diary. During the 2008 Campaign Obama proposed a Donit Hole Cap Increase that would give a pass to people earning between the then current cap ($96,700 now $113,700) and  $250,000. This move, clearly intended to show that he was serious about addressing Social Security Solvency but still equally intent on not violating his promise not to increase taxes on those making under $250k made his position a muddled mess. On the one hand it totally violated the insurance principle that has made SS the strong program that it is even as it gave a free pass to the billionaires whose various gains on capital wouldn't fall under 'covered income'. Obama never made a coherent case why a relatively narrow slice of taxpayers should be targeted while giving their top assistants and their owner/bosses a free pass. Dumb all the way around.

    On the other hand if you have to change the cap formula, changing it in a way that restores the 90% of covered income level that it used to be (as opposed to 83-84% today) is at least logical both on historical grounds and in keeping the insurance principal intact. And this would be doubly so if we simultaneously worked to reduce overall income inequality in ways that shifted more from the top 1% and top 0.1% to the bottom 90%, including those earning over the current cap. All that makes perfect sense.

    Rube Goldberg Donut Holes combined with Chained-CPI? Give us a break Mr. President, stop trying to fix the parts of FDRs cleverly constructed mechanism that are not in fact broke.

    As VClib says "It's Wage Insurance". To which I would add: "Period. Stupidhead."

    socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

    by Bruce Webb on Fri Mar 29, 2013 at 10:22:35 AM PDT

    •  Why the donut hole (3+ / 0-)
      Recommended by:
      tardis10, Words In Action, Calgacus

      If raising the cap is not just a mechanism to increase revenue, but also an attempt to reverse the damage done to Social Security's tax base by rising inequality the donut hole makes more sense.

      The reason the share of wages below the cap has fallen from roughly 90% in 1983 to 83% is not because of growth in the numbers of people earning between (in present dollars) $110,000 and $200,000. The big wages gains are above this level.

      I agree that this logic eventually drives you away from the payroll tax concept of funding wage replacement insurance, and more toward the income tax principle (tax at higher rates the income with lower marginal utility).

      The big problem with the tax cap is that it is inappropriately indexed to average wages instead of wage shares. Set the tax cap so that it covers 90% of all covered earnings. That means trends in inequality won't erode the tax base. That said, the remedy for inequality certainly falls elsewhere. It is not a job for the payroll tax.

      Finally, Social security is wage insurance yes, but lets be even clearer:

      Social Security is life insurance.
      Social Security is disability insurance
      Social Security is insurance against inflation
      Social Security is insurance against outliving your assets

    •  Thats why I asked VClib to contribute (0+ / 0-)

      I felt he would deliver a real good diary. And deliver he did.

      Is VC a she? Hope I didnt put my foot in my mouth.

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Fri Mar 29, 2013 at 06:45:55 PM PDT

      [ Parent ]

  •  Insurance pays out under certain terms. (1+ / 0-)
    Recommended by:
    erush1345

    It's a simple concept.

    All it would mean is that if you don't meet those terms, then you don't get benefits.

    Kinda like every other insurance program.

    Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

    by Words In Action on Fri Mar 29, 2013 at 10:53:32 AM PDT

    •  Guess this means every other insurance program (1+ / 0-)
      Recommended by:
      aliasalias

      is not an insurance program, since not every gets a benefit payment.

      And I guess it must mean that those who do are getting something for nothing...

      Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

      by Words In Action on Fri Mar 29, 2013 at 11:23:32 AM PDT

      [ Parent ]

      •  Not every person who pays into SS gets it (4+ / 0-)
        Recommended by:
        erush1345, nchristine, Roger Fox, VClib

        some don't live long enough to get their benefits.  The "insured event" is outliving your ability to work for a living.

        When FDR designed the program, a lot of people did not live long enough to collect SS retirement.  Now, more people -- but certainly not everybody -- do live long enough.  

        And some people don't pay into the system at all, like public school teachers here in Louisiana.  They have their own retirement system, they don't pay into SS, and they don't get SS retirement benefits.  

        It's insurance like my flood insurance on my house.  I insure against an event, and the higher the value I insure, the more my premiums. I am allowed to insure the value of my house up to $250,000 (the maximum for federal flood insurance).  If my house is worth only $150,000, that's all I can insure, and my premiums reflect that.  If my house is worth $251,000 or $1 million, I can only insure $250,000 , and the premiums are the same regardless if my house was worth $251,000 or $1 million. The payout is also the same, regardless if my house was worth $251,000 or $1 million.  

        The way FDR designed SS is as wage insurance, like my flood insurance.  The major differences is that, while flood insurance pays out in a lump sum, SS turns into effectively an annuity if you reach the insured event.  

        •  Flood insurance only pays if you have a flood. (1+ / 0-)
          Recommended by:
          aliasalias

          Regardless of how much you put in.

          Social Security could easily do the same, perfectly understandably.

          This is just about what you think is "fair," based on assumptions that what people earn in the first place is "fair."

          Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

          by Words In Action on Fri Mar 29, 2013 at 11:56:39 AM PDT

          [ Parent ]

          •  Social Security is largely the same (2+ / 0-)
            Recommended by:
            erush1345, VClib

            It takes your highest 3 years paying "insurance" and bases your premiums on that.  If you didn't work at all for most of your life, and started working at 60, it would pay out based on the highest three years.

            If you were, say, a public school teacher who DIDN'T pay into SS for most of your life, and started another job where you were paying SS at 55, you'd again get SS based on the highest three years of paying SS premiums.

            I'm not saying it's exactly like flood insurance.  But it was specifically designed as insurance.  FDR called it an "old age insurance system" that paid out annuities.  

        •  Thanks. ALways cogent. (1+ / 0-)
          Recommended by:
          VClib

          VC gave you a hat tip, so thanks from me for helping out with this very excellent dairy.

          I find it so strange that most of those advocating for cap removal arent familiar with the resulting domino effect. Those that do understand it creates a 14k monthly check, either dont care, say cap the benefit, or thats not a means test.

          Some also make an economic argument over what was a political consideration. FDR knew FICA didnt make economic sense, he stated it was a political move.

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Fri Mar 29, 2013 at 06:54:17 PM PDT

          [ Parent ]

  •  I'll never get a cent from a "wage insurance" (4+ / 0-)

    policy I bought decades ago.  I bought what was marketed to me as a disability policy with a reliable issuer, and paid premiums for 15 years.  Over that time the original company was bought out, and then bought out again, finally by a slimeball company that denied payments to people with legitimate claims (like a surgeon who developed Parkinsons).  
      I don't expect to ever "get back" as much as I've paid in for auto, home, renters, earthquake, and personal liability insurance policies.
      So why do million dollar earners expect or demand to get back the same proportion they've paid into SS when they don't on other "insurance" policies they buy?

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Fri Mar 29, 2013 at 10:54:23 AM PDT

  •  I'm not going to (2+ / 0-)
    Recommended by:
    lunachickie, aliasalias

    get into this debate again.

    I've avoided most of these diaries for this very reason.

    It's basically between the corporate Democrats and the Democrats. When we disagree, it tends to be over fundamental issues related to the Party platform. Some people just aren't that into it.

    You would never hear a Democrat use the words "wealth redistribution."

    It just goes to show how artificial a two party system is.

    Big tents are for circuses, not political parties.

    Sayanora, muchachos

    ;^)

    Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

    by Words In Action on Fri Mar 29, 2013 at 11:03:29 AM PDT

  •  Excellent diary. Thanks. (8+ / 0-)

    I attempt to address this problem in the broader context of neoliberalism, anymore.

    I fear that all of the social insurance programs will be the equivalent of 'means tested,' when all the 'reforms' are passed and enacted.

    I draw this conclusion from written material and papers, as well as 'spoken words,' of politicians and so-called experts who appear on C-Span testifying in Congressional Hearings, etc.

    A reading of The Moment Of Truth, The Gang of Six proposal (which I posted on joanneleon's recent Social Security diary), the Rivlin-Domenici Deficit Reduction Plan, etc., seems to indicate that we're seeing the neoliberal vision of 'small government' being implemented--especially in the realm of social insurance programs.

    snip

    Here's an excerpt from the President's own Fiscal Commission, from the Chairman's Mark, The Moment Of Truth.  This is on Page 12 of text [13 if counting the cover or title page] of The Moment Of Truth.  

    It reads:    


    Our Guiding Principles And Values

    Protect the truly disadvantaged.  We must ensure that our nation has a robust, affordable, fair, and sustainable safety net.  Benefits should be focused on those who need them the most.

    And here are the exact words from a Pete Peterson Q&A.
    We also need to maintain a strong social safety net for those who need it, including Social Security and Medicare.
    Here's an excerpt from floridagal's excellent diary:
    One of the most frustrating thing to me is that the now president of the Third Way think tank, one of the policy shops for Democrats....wrote an article in 1995 calling for Social Security to go private for all but the needy. This is from the L.A. Times in 1995 by Jon Cowan.

    Current payout levels can't be sustained. Let the retirement savings system go private for all but the needy.

    "The time has come to reinvent Social Security based on a "cut and privatize" approach that will be fair to all age groups. This reinvention should be based on three principles:

    * Start immediately to lower boomers' expectations of the returns they will get and encourage them to increase private savings. My generation and my kids' will have to pay upward of 30% of our income in payroll taxes to finance the boomers' retirement at today's benefit levels. That's unreasonable and unworkable. Instead, we'll have to dramatically slash benefits to stay solvent, and we should let folks know now what to expect when the ax falls. . . .

    snip
    The Senate HELP Committee, led by Senator Tom Harkin, has been working on a plan to mandate private retirement accounts for several years.

    I've seen conflicting versions.  One paper says that it will be mandatory--another paper says there will be automatic enrollment, but with an 'opt out.'  

    So, can't say definitively whether it's mandatory at this time, or not.

    Now, ostensibly, these will only apply to folks who aren't already enrolled in an employer-sponsored retirement plan.  Not sure if that applies only to those not in a defined benefit plan, or to individuals who don't have access to any type of retirement plan.

    Problem with that is, the plan requirements, eligibility, and criteria can change.

    And don't forget--incrementalism is the way that we've gotten to where we are now.

    Here's a link to the USA Retirement Plan that I saw Senator Harkin talking about on C-Span last year.

    He hoped to have it in place by next year (IOW, 2013).

    snip

    I'll post the video of him talking about it (later), if I can find it again.

    I'm not making a judgment for or against the USA Retirement Plan.  It is difficult to get the details of the plan.  

    They details appear to be contained on 'investor' websites.  I've attempted to register on a couple of them, but can't because I'm not a financial industry professional.

    So the plan 'details' aren't paywalled--they're just not readily accessible for folks outside of the financial industry.  

    Harkins' plan, or study, is worth reading.  But it lacks detail or specificity.

    [For now, I'm not even looking to discuss his proposed private retirement plans, so much as to agree with Florida gal that some (like the Third Way) might be trying to position us so that the social insurance programs can either be eliminated, or pretty much completely privatized.]

    I heard the Canadian-American (sometimes finance) writer and journalist Chrystia Freeland on the radio program Left, Right and Center some time ago.

    Ms Freeland mentioned that she was seeing a policy shift among academia and think tank folks.

    The emphasis is now on "predistribution, not redistribution."
    That's the reason that the politicians talk incessantly about preschool and funding it (and I'm not bashing the idea, here), at the same time that they seem to want to slash funding for programs for the elderly.
    IOW, as David Brooks so bluntly put it on a Sunday talk show (paraphrased):  The economic focus is and should be on the young who have years of productivity ahead of them, not on the 'unproductive'--the elderly.

    It appears to me that the PtB believe that this is the most opportune time, in a long time, to affect their long sought-after 'reforms.'  The split Congress and a Democratic President seems to be ideal to them (from all that I read and hear).

    I do believe that the dismantling of our social insurance programs must be viewed in (and dealth with) the context of the broader neoliberal vision.  Because until we stop the advancement of this ideology (which may not be possible), I don't know that we can affect the outcome of the proposed Social Security 'reforms.'

    The PtB appear to be proceeding with their plans to privatize our existing social insurance programs, with possibly a miniscule Social Security program left intact, primarily for those folks way below the federal poverty level (FPL).

    Likely, the rest of us will be shuttled into private medical insurance, private savings accounts (in lieu of any substantial Social Security monthly benefit), etc.

    So, I plan to fight like heck against the proposed cuts, as each one is being considered.

    But I believe that the broader philosophical discussion has already taken place among the Elites.

    And that clearly, the American People were not allowed to participate in that discussion.

    Mollie

    "Only he who can see the invisible, can do the impossible."-- Frank L. Gaines


    hiddennplainsight

    by musiccitymollie on Fri Mar 29, 2013 at 11:19:24 AM PDT

    •  Harkin's staunchly liberal plan (5+ / 0-)

      is proposed in addition to SS. Basically he wants to offer a better alternative than 401ks (& similar) that are loaded with high fees and too much risk. There are similar proposals over at Demos & elsewhere. While I think these plans could be a great vehicle, wages have to rise significantly (as does employment) for them to be as useful as Harkin envisions. The current wages paid to most in the US don't allow for much saving as every study has shown.
      That said,I agree Mollie, that the current crop of mandarins seem to think that allowing 'the poors' just enough to not starve while funneling every bit of wealth this country's labor and resources produce to the top is A-OK. Greed, arrogance and ignorance rule DC.

      "George RR Martin is not your bitch" ~~ Neil Gaiman

      by tardis10 on Fri Mar 29, 2013 at 11:59:37 AM PDT

      [ Parent ]

      •  Thanks for your comments, tardis10. I've read the (3+ / 0-)
        Recommended by:
        tardis10, nchristine, aliasalias

        plan and a Demos analysis of it.  I decline to make a judgment on it because I can't find enough of the plan specifics, for me to do so.

        Here's the link to the registration page of one of the investment websites that I'd like to access, but can't.

        It's InvestmentNews.  Apparently this website contains an article which I see constantly referred to, but is NEVER REPRINTED.  

        IOW, all the investment websites link to this one, and you must be registered (or from the way I read it, in the financial industry) to access this article or paper.  

        Now if I've mistaken this, please correct me.  And/or if we've got folks here who meet the criteria and can register, I'd be eternally grateful to you, if you would do so, and copy and paste the article for all to read.  ;-)

        The title of the piece is: Sen. Harkin proposes retirement plan revamp, Social Security fix.

        [And they add that Sen. Tom Harkin, D-Iowa, on Friday proposed a way to bolster retirement savings at work, plus a series of improvements to Social Security.]

        I admire Senator Harkin, and my reticence to venture a firm opinion on this plan until I can ferret out the finer details, was not meant in any way to cast dispersions on him (or his plan).

        OTOH, having seen many glowing insurance industry articles about his plan or initiative, I would love to see more details.  I'm just a curious sort of person, anyway.  ;-)

        This plan does reduce the 'burden' on employers, from everything that I read.  So I'm just wanting to make sure that it is a bill friendly to the average working stiff, and not just to the insurance and annuity industry.

        Here's an excerpt and link below.

        Sen. Harkin, chairman of HELP Committee, to retire

        In early December [2012], Harkin said that the retirement deficit crisis prompted him to recently pen a report, “The Retirement Crisis and a Plan to Solve It”, which includes a proposal to provide universal access to pension plans called Universal, Secure and Adaptable (USA) Retirement Funds.

        Harkin said that he intends to put his report “in bill form” when the new Congress convenes in January. A spokesperson for Harkin’s office told AdvisorOne on Friday that bill would likely be introduced sometime in February. Harkin’s plan will be two-pronged: USA Retirement Funds—which he described as innovative, privately run, hybrid pension plans that incorporate many of the benefits of traditional pensions while substantially reducing the burden on employers—as well as expanding Social Security benefits by $65 per month.

        I fear 'unintended consequences,' too.  [Or maybe I should say intended, but not spoken.]

        I heard Geithner testify on C-Span that the Administration wouldn't push raising the age of Medicare eligiblity up to Age 67 UNTIL the Administration got a ruling on the ACA.

        IOW, from that hearing, it appeared that that the ACA was helping lay the groundwork for 'raising the age of Medicare eligibiltiy.'

        Needless to say, that was not one of the Admninistration's 'talking points' when the tried to sell the ACA.  

        During his next two years in Congress, Harkin said he would also work to advance the following:

        • Moving forward with bills to ensure that all Americans are able to achieve the promise of a quality education—beginning in early childhood, continuing through elementary and high school, and culminating with higher education.

        • Working to significantly increase the employment of individuals with disabilities, in order to continue to fulfill the promise of the Americans with Disabilities Act.


        I am very concerned about the last topic.  I've seen some of the HELP Committee Hearings, and it appears to me that the push may be to limit the number of folks who can qualify for SSDI.  And/or to bolster the 'work-requirements.'

        If the effect is not detrimental to the disabled, that's OK.  But there is a fine line between 'helping' them, and imposing restrictions that would cause them hardship, IMHO.

        Even the statement above somewhat implies this (though framed in a positive light).

        I saw Senator Coburn (OK), a Republican, on Washington Journal (C-Span) some time ago.

        He looked into the camera at one point as said (paraphrased):

        "If you're 'on disability,' I'm coming for you."

        I came darn near close to falling out of my chair, LOL!

        Just like the Unemployment Insurance program has been revamped by this Administration a couple of years ago, with qualifications and benefits greatly tightened, (the max federal extended UE benefits got shortened from 99 weeks, to seventy-plus--don't remember exactly, and the work requirements were expanded), this may also be what is getting ready to happen to our Social Security Disability program.  

        I believe that all this bears watching, by all of us.  I've tried to keep up with it, but with so much else going on, it's almost impossible to do so, LOL!

        And your point about wages needing to rise first is 'spot on.'  

        Although I'm not sure how we go about trying to fix this problem, it is definitely one that I believe progressive activists need to tackle--and soon!

        According to Harkin's plan, 'half of all Americans have less than $10,000 in savings, and nearly half of the oldest Baby Boomers are at risk of not having sufficient retirement resources to pay for basic retirement expenses and healthcare costs.'

        Something clearly needs to be done.

        Mollie

        "Only he who can see the invisible, can do the impossible."-- Frank L. Gaines


        hiddennplainsight

        by musiccitymollie on Fri Mar 29, 2013 at 01:51:28 PM PDT

        [ Parent ]

        •  Like you,I'm a trust but (3+ / 0-)
          Recommended by:
          musiccitymollie, nchristine, VClib

          verify type. :) More details on Harkin's proposal would definitely be needed to endorse it. In truth,I would rather just see plain,old school SS truly strengthened to pay out a  larger,replacement benefit. SS works,it has low operating costs and more privatizing of our flimsy social compact isn't optimal.(for many,many reasons) Why further line the pockets of FIRE? Nonetheless,I recognize the political reality may mean we "have" to....%&*# has there ever been a time when this:" Yes, as through this world I've wandered I've seen lots of funny men;
          Some will rob you with a six-gun,
          And some with a fountain pen"
          was more true?
          As for Coburn and SSDI,no trust to verify there. He and his cabal  remind me of another presidential saying,"If you can't convince 'em, confuse 'em.But this time it won't work.” Here's hoping that Harry Truman was right.
           

          "George RR Martin is not your bitch" ~~ Neil Gaiman

          by tardis10 on Fri Mar 29, 2013 at 02:34:15 PM PDT

          [ Parent ]

  •  I favor raising the cap and benfits to actuarially (3+ / 0-)
    Recommended by:
    coffeetalk, erush1345, VClib

    keep the trust solvent into the future.  I strongly oppose making it a back door income tax.

    Never argue with an idiot. They will drag you down to their level and beat you with experience.

    by thestructureguy on Fri Mar 29, 2013 at 11:29:01 AM PDT

    •  Just so I get this straight. (1+ / 0-)
      Recommended by:
      aliasalias

      All of the other social programs are backdoor income taxes?

      I mean, I know that's what the Republicans would say, I'm just trying understand if that's what you're saying.

      Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

      by Words In Action on Fri Mar 29, 2013 at 11:37:23 AM PDT

      [ Parent ]

      •  No, what he is saying, I think, is that (3+ / 0-)
        Recommended by:
        erush1345, Roger Fox, VClib

        the income tax system is supposed to be progressive, where upper incomes pay a higher percentage of their income than lower incomes, and where what you get from what is funded by your income taxes is not related to the amount of taxes paid in.  No one says "I only want what I paid for" with respect to income taxes.  A two-income family with each spouse earning $200,000 does not get $100,000 a year (about what they pay in income taxes if they are subject to the AMT) in direct benefits from their income taxes.   Their $100,000 a year in income taxes are used to fund the country as a whole, and they bear a much higher burden of funding the country as a whole (things that benefit us all) because they have more disposable income, i.e., it doesn't take food off their table like a high income tax might do for lower income people.  

        Because Social Security is wage insurance, the funding for it is not supposed to be progressive like an income tax.  It is supposed to be linked to the value of what you are insuring --  your ability to earn wages -- and the amount of benefits you will get.  

  •  How did we get here, who would have thought? (5+ / 0-)

    NYTimes

    “The president has said this to the Republicans: ‘You want to do entitlement reform? I do, too. I can produce entitlement reform and bring Democrats to the table, because I am a Democratic president. And so I’m ready to sit down with you and work out an approach,’ ” Senator Richard J. Durbin of Illinois, a Democratic leader, said at a recent forum hosted by The Wall Street Journal.

    "Who are these men who really run this land? And why do they run it with such a thoughtless hand?" David Crosby

    by allenjo on Fri Mar 29, 2013 at 11:54:12 AM PDT

  •  The problem is that we're well-beyond (1+ / 0-)
    Recommended by:
    Words In Action

    the ability to re-frame this to reflect Social Security's original intent--insurance. To begin with, way too many people believe the decades-old corporate information bullshit that "the fund is full of IOUs" for that to work. Not to mention that the re-frame will certainly come with a built-in implication that "insurance policies need to be re-written from time to time".

    Um, no thanks.

    This screed further co-mingles the belief that Social Security should be left alone completely by postulating that if there's any "fixing" to be done to the cap on earnings, that it can only be done via the tax code. That's insane. Everyone hates the tax code to begin with. And no one would believe that the tax code couldn't be adjusted to reflect any new Social Security parameters.  

    It is time to #Occupy Media.

    by lunachickie on Fri Mar 29, 2013 at 12:15:31 PM PDT

    •  No, Sorry (2+ / 0-)
      Recommended by:
      tardis10, VClib

      I don't agree that we can't reframe the issue. Most people know what Social Security really is because they have a close family member getting it.

      Whether we count it as insurance or not is another question, but changing the cap is playing around the edges. We need to have a more aggressive position on this.

      •  How's that? (1+ / 0-)
        Recommended by:
        Words In Action
        changing the cap is playing around the edges
        The point is obtaining revenue to offset these alleged shortfalls. Changing the cap does that.

        What is more aggressive than that?  

        It is time to #Occupy Media.

        by lunachickie on Fri Mar 29, 2013 at 12:42:08 PM PDT

        [ Parent ]

        •  Creating 20 million jobs and raising the min wage? (1+ / 0-)
          Recommended by:
          VClib

          In 2011 the CBO scored the alleged shortfall at .6% of GDP over 75 years.

          We have a 15 trillion dollar economy, .6% is 90 billion.

          Median income for a male working full time year round is 36k.

          SOooooooo   creating 20 million jobs at 36k is 89.2 billion more FICA, or nearly .6% of GDP.
          U6 unemployment is about 14.7%, with a workforce of 154 million, thats 23 million unemployed.

          Funny how the jobs deficit nearly matches the SS deficit, so called.

          Now what was more aggressive, what has a far wider reach?

          So you want to remove the cap and create a 168k annual SS benefit?

          You want to insure some uber rich person that has capital?

          Why insure capital? WTF would you do that?

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Fri Mar 29, 2013 at 07:11:32 PM PDT

          [ Parent ]

  •  I Agree With You, VClib (5+ / 0-)

    I've seen way too much talk about changing the cap. Adjusting it back to 90% makes sense, but I would hate to see rich people be the primary revenue source. They already run our politics. Imagine if they were the basic source of funds for Social Security. They'd step in and write all the rules. This was set up very carefully and we should not make precipitous adjustments to it.

    At the risk of self promotion, I have a diary queued up for this afternoon that says we have better options than screwing with the cap. And, we need to refocus this debate off of fixing Social Security funding and back onto the main issue: jobs and wages.

    I think you did a great job. Social Security is supposed to keep retired workers out of poverty. It was never intended to be a soup-to-nuts solution to retirement. "The political optics of Social Security are very important." Absolutely. Right on.

    •  Nobody knew the economy was going to tank (2+ / 0-)
      Recommended by:
      eltee, Words In Action

      and that 401-ks were going to evaporate, and that people who worked hard and saved would have to spend their savings in their 40s and 50s, either.

      It was never intended to be a soup-to-nuts solution to retirement.
      No. It wasn't. But it is now, for millions of us.

      I look forward to reading your other solutions later on :)

      It is time to #Occupy Media.

      by lunachickie on Fri Mar 29, 2013 at 12:52:20 PM PDT

      [ Parent ]

    •  Lets talk about jobs and wages (0+ / 0-)

      1) see my comment above titled

      Creating 20 million jobs and raising the min wage?

      2) then check out my super duper graphic

       photo create20millionjobsFICA.png

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Fri Mar 29, 2013 at 07:14:38 PM PDT

      [ Parent ]

    •  Thanks for the kind words LT (0+ / 0-)

      "let's talk about that"

      by VClib on Fri Mar 29, 2013 at 07:58:23 PM PDT

      [ Parent ]

  •  There is there is another option (3+ / 0-)
    Recommended by:
    nchristine, tardis10, musiccitymollie

    you are not considering. You can add a fourth fifth and sixth benefit level for higher income earners.

    Currently beneficiaries are paid 90% of the first $791 of total calculated income, 32% of the next amount up to $4,768 and 15% for the amount over that up to a certain cap. If you lift the cap on wages subject to Social Security taxes, you can add additional benefit formula percentages which would provide, for instance, 10% for amounts up to $10,000, 5 percent for amounts between 10 and $50,000 and so on. Numbers can be worked out that keep the benefit from becoming exorbitant.

    This is not an either/or situation. You can maintain the integrity of the program financially by lifting the cap while continuing to provide some marginal increase in benefits for the very high income earners. The integrity of the program is maintained at both levels.

    This concept is totally consistent with how Social Security has always been structured. The tax collection side has always been very regressive while the benefit side has always been progressive.

    Using the same logic one can also change the program by taxing all income not just wages. Increased benefits would of course be provided for those beneficiaries.

    Further, affiant sayeth not.

    by Gary Norton on Fri Mar 29, 2013 at 03:18:03 PM PDT

    •  Gary - I favor raising the cap (1+ / 0-)
      Recommended by:
      Gary Norton

      and continuing to bend the algorithm to favor low income beneficiaries of the system. We might argue about the specifics, but I agree with you in concept. As you note it would be consistent with past practices.

      "let's talk about that"

      by VClib on Fri Mar 29, 2013 at 08:00:46 PM PDT

      [ Parent ]

  •  Some ideas... (0+ / 0-)

    Let's say we need to stay within the parameters of the original intent behind social security. How do we improve it so that it remains solvent and meets our country's current needs? (Current need: guaranteed retirement income...something no one is able to get anymore anywhere except with SS. That's a result of screwing around with our banking system.)

    So let's re-adjust the cap to what it should be. But what if we also allowed people to add additional monies for additional credits? Like EXTRA insurance? Here's the scenario:

    Sally is 50 years old and she makes 125,000. She pays the maximum amount in social security and, if lucky, would have her income rise every year until she retired.

    But let's say she spent 20 years raising kids so she's only been working for 10 years. Or maybe she's in a job that she knows will go away in a few years, so she might be making only $50,000 in her final years. Or let's say she figures she might want a little extra on top of her regular SS benefit.

    Why shouldn't she be able to "buy" extra SS? This would allow women to make up for years they spent raising kids and it would alllow us older folks to slow down a bit even before we retire. Or, we could simply prefer using SS instead of a nasty old 401k.

    If it was offered I would throw a huge chunk of additional change into my SS to ensure that I could at least take a lower paying job (or fewer hours) when I'm in my early 60s.

    Being a boomer, I think this plan is especially appealing to my age group. I get so tired of hearing about how it's OUR fault SS is going bust (never mind the fact that we paid for our parents' SS and probably some of our grandparents!) But I'd love the chance to pad my SS a little more...I've had two 401Ks that both lost pretty much everything.

    •  Whats with the solvent thing? (0+ / 0-)

      Memo to eltee, create jobs and raise Min wage SS is very likely good thru 2090

       photo SSD2-1.png

      SST report gives 4 dates, 2029, 2033, 2048 and 2090 for depletion.

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Fri Mar 29, 2013 at 07:19:38 PM PDT

      [ Parent ]

      •  Great....but I still want more (0+ / 0-)

        If the banks are going to make it so difficult for the average person to save/invest safely then I'd prefer to put all my eggs in SSN and get even more back.

        •  Federal TSP (Thrift Savings Plan) (0+ / 0-)

          Demand that the TSP be opened to all Americans.

          Last time I checked there was an option that essentially mirrored Social Security.

          Of course opening TSP to non-federal employees would take huge profits out of the pockets of mutual funds and other investment brokers and 'coumselors' so not likely to happen.

          TSP is kinda the equivalent of the Public Option in Health Care Reform. Too cost efficient for citizens to be allowed to compete with private industry.

          Because Capitalism. And Freedom. And Campaign Contributions. (did I say that last one out loud?)

          SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

          by Bruce Webb on Sat Mar 30, 2013 at 11:32:53 AM PDT

          [ Parent ]

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